In looking at my Networth IQ this past month, I was noticing that one of my biggest assets is my wife’s diamond ring. I made a considerable investment into it, so I got to thinking… Do diamonds depreciate?

I’ve done quite a bit of research and following is what I’ve come up with:

When you decide to finally pull the trigger and make that investment into your wife’s diamond, you’re not only paying for the rock itself- you’re paying for the profit of the seller and the sales tax incurred, which in some cases can amount to a pretty large sum. So… if you were to buy the diamond and immediately try to sell it back to the retailer, they would immediately discount it by the cost of those two things. With that in mind, as soon as you buy your diamond, it’s probably “depreciated” in that sense.

In holding on to your diamond, it’s subject to the same laws as anything else is- supply and demand. Sometimes it goes up and sometimes it goes down, all depending on the state of the diamond market.

With all of this being said, I have heard that the diamond market in general goes up about 5% yearly… I definitely don’t consider myself an expert on the issue, but this is what I’ve found. So here’s the assumption you could quite possibly make: your diamond, once purchased, will take a hard fall in value because of the profit you just paid out to the retailer; but after that, if you take care of it, the diamond (depending on what it is and what the levels of demand look like) should appreciate roughly 5% every year. Not bad, right? At least it’s not like your car!

I wouldn’t ever recommend buying a diamond as an investment because they aren’t built that way; honestly, would you ever buy any stocks in a company if you didn’t know of any brokers or how to even access them? Our best bet is to probably find a friend that needs a diamond and see if we can’t swing a deal!

By and large, diamonds just hold their value! Don’t consider them as an investment. As long as you don’t damage them, you should be able to sell it and do okay. Just know, however, that you will probably never get out of it what you put into it. You lose big when you buy it originally because of the profit in the sale for the retailer. After that, it pretty much just holds its value.

So- I just “depreciated” the value of my wife’s diamond about 40% from the retail price, and that should be its long-term value. With inflation how it is, a diamond just keeps up with it.

Somehow I stumbled onto your web-site / blog. LOVE it so far all that I have been reading….I’ll add to my favorites….Now, about the Diamond and value. OK to assume it holds it’s depreciated value, here in Canada at Spence Diamonds, if all fails, you can return the RING and “trade-in” after all, would you recycle it and present it to your next bride to be? Anyway, you need to upgrade it for the trade in to work you MUST spend 1/2 it’s original value. So, if it was originally 4K, you bring it back and have to upgrade by 2K, Now total diamond value is 6K and the next would cost you…an additional 3K…and so on. But the BIGGEST culprit, INSURANCE! You need to insure this ROCK now, if Lost or stolen, your home insurance only pays so much! So, any value your ROCK holds gets chewed away by Insurance! So, in terms of an Investment….it’s seeing HER smile and saying YES, I’ll marry you!! That’s a worthy investment and I am sure that no matter how savay with Moola you are….this is no time to think Investment… You’ve invested in Smiles….Priceless. (I hope) Keep up the blogging!! Steve…..

And great comment! I didn’t even consider the insurance! I haven’t insured my wife’s ring yet and need to… gradually, as you pay and pay and pay, all of that upkeep on the diamond will end up costing you more and more.

Hey Trevor, ya it’s an endless cycle, Now let me tell you of another depreciating Luxury, but, think about it, anything that is a Luxury seems always to be a depreciating one at that. My wife, before we met, had a very heavy and WARM, Racoon Fur coat, I thought it was ugly, but I am a guy!! I feel that she was at the Mink level and had her one year trade the Racoon for a Mink, NICE choice, not as warm a coat but, classy and reversable….well, this is not a good investment either! Not only do you have to INSURE that but it requires, Storage and periodic special cleaning! Nice fur! the coon as well required the same but, not as much a year. GOLD seems to be down a few hundred an ounce, I was going to dive in at 1025/ounce, glad I felt that I could not make enuff at that price, even though being assured by an investor that it would reach as high as 1300.00 / ounce. Not a very good ROI for me. I did by 62 shares of Apple at 82.00 sold at 125.00 feeling at that point I would take my initial 5K out of the loop. I am waiting for it to see if my remaining 18 shares will hit at least 200 soon, maybe in September when Apple brings Newer products to the market. (More later) Fur = No Good. She hardly wears it here in Calgary, we went out more in Toronto.